Until recently, GP-led secondary deals have generally been associated with “zombie funds” with lingering, hard-to-sell assets. However, 2017 witnessed the maturation of a relatively new feature in the private equity industry’s liquidity toolkit.

Sale-leaseback transactions have experienced record activity since 2010, with total deal volume for 2015 reaching about $11.6 billion. Access to credit has played an important role in driving demand. Nearly a decade after the financial crisis, bank credit remains relatively expensive and more conservatively structured than prior to the recession, making it challenging for many middle-market companies to access.

As companies expand operations into emerging markets and investors search for investment opportunities in Asia and Latin America, they are also increasingly exposed to additional risk in these countries.